Black Friday is a day when you can find some tremendous deals, assuming you’re willing to fight through the crowds.
So, to commemorate the occasion, we look at three stocks that are also on sale. As a bonus, you don’t have to risk your safety and well-being to buy them.
TransCanada Corporation (TSX:TRP)(NYSE:TRP) has certainly gotten its fair share of headlines thanks mainly to the now-rejected Keystone XL pipeline. But beneath the surface, this is actually a very strong company. It operates critical infrastructure, makes revenue from long-term contracts, and should benefit from increased pipeline demand in the United States.
Yet investors have punished the stock, thinking that low oil prices will seriously hurt the company. As a result, its dividend now yields nearly 5%, good enough for ninth place on the S&P/TSX 60. But TransCanada has grown its dividend very consistently and still plans to increase its payout by 8% per year over the next two years.
Amaya Inc. (TSX:AYA)(NASDAQ:AYA) is the parent company of PokerStars, the runaway leader in online poker.
This is a very good business to be in. Online poker is a very high-margin business, and PokerStars pays very little tax because of its domicile in the Isle of Man. Better yet, its market share lead should be safe, since other sites cannot offer the same breadth of games, nor can they offer such lucrative tournaments.
Amaya also has some tremendous opportunities to grow. For starters, the company has begun offering casino games and sports betting and has been marketing this heavily to its existing poker players. Secondly, parts of the United States are once again allowing online gambling.
There is some bad news. Amaya reported very disappointing third-quarter numbers and the stock price plunged. As a result, the shares now trade well below 15 times free cash flow, a very low number for a company with such strong prospects.
3. Home Capital Group
Home Capital Group Inc. (TSX:HCG) has long been a favourite of short sellers, mainly because it is seen as a way to bet against Canadian housing.
Then in late July, Home Capital said it cut ties with 45 mortgage brokers after discovering that many of these brokers’ clients had falsified income information while applying for loans. All of a sudden, there were a lot more sellers than buyers of Home Capital, and the stock price went into a tailspin. It has yet to recover.
But Home Capital has a tremendous track record of minimizing loan losses, and it has very little exposure to Canada’s energy-producing regions. The company has plenty of room to grow, and it also has opportunities to reduce its funding costs. Best of all, Home Capital trades at only 7.5 times earnings. At that price, this stock is as good as any deal you’ll find on Black Friday.